Wall Street Brief (March 24): US stocks rebounded sharply on Monday, as the market shifted from energy panic to risk recovery; the plunge in oil prices and rising expectations of US-Iran talks led small-cap and cyclical stocks higher.

Summary: US stocks rebounded significantly on Monday, with the S&P 500 up 1.15%, Nasdaq up 1.38%, Dow Jones up 1.38%, and Russell 2000 up 2.29%; VIX fell to 26.15, down 2.35% for the day, indicating some release of the extreme tension accumulated on Friday (such indicators are for sentiment reference only). The core driver of the market that day was the simultaneous plunge in oil prices and the rise in negotiation expectations: crude oil plummeted 9.40%, Trump signaled engagement with Iran, and the market quickly recovered the risk premium previously squeezed out by war risks. In terms of sectors, small-caps, discretionary consumption, and high-beta sectors led the gains, with the recovery not solely reliant on a few large-cap stocks. In broader asset classes, the US Dollar Index fell 0.37%, gold dropped 2.04%, crude oil plunged 9.40%, and Bitcoin rose 3.57%. Overall, Monday appeared more like a rapid unwind of 'energy panic trades' rather than unconditional bullishness after the complete removal of war risks.

I. Major Events

The truly independent event that dominated pricing throughout Monday's market was singular: Trump suddenly signaled engagement between the US and Iran and postponed the strike on Iran’s power facilities by five days. Expectations of an escalation in conflict immediately cooled, crude oil plummeted 9.40% in a single day, and risk assets rebounded simultaneously. As a result, not only did the S&P 500 and Nasdaq close significantly higher, but the Russell 2000 surged 2.29%, better reflecting how capital first unwound the risk premium pushed higher last week by 'energy panic.' It is worth noting that Iran later denied holding talks with the US, and the IEA continued to warn that war risks remain a significant threat to the global economy. These follow-up developments acted more like validations and constraints to the main narrative: Monday's rally was closer to 'risk recovery driven by news,' rather than a trend reversal following confirmed elimination of geopolitical variables.

II. Major Trends

From a slightly longer-term perspective, Monday’s rebound wasn’t a replay of the old script where 'the Magnificent Seven drove index gains,' but instead leaned toward broader recovery. Over a three-month horizon, IWM remained among the strongest major indices (March: -1.66%) and continued to outperform SPY (-1.66% vs. -4.48%); RSP also continued to outperform SPY (-0.73% vs. -4.48%), indicating that breadth has been better than the weighted indices in the medium term. In terms of style, SPYV continued to outperform SPYG (-1.65% vs. -7.33%), and over a two-week horizon, growth stocks saw larger drawdowns compared to value stocks (SPYG -3.60% vs. SPYV -3.12%). Meanwhile, MAGS fell 3.95% over two weeks, showing that crowded trades in tech giants are still being digested. Taken together, Monday looked more like 'a collective sigh of relief after oil prices retreated,' rather than big tech reclaiming control of the indices.

III. Market Sentiment

Sentiment indeed eased compared to Friday, but it was far from relaxed. VIX falling to 26.15 indicated some loosening of extreme defensive sentiment, but above 26 remains a high-volatility zone, and the market remains highly sensitive to sudden news. The CNN Fear & Greed Index stayed at 16 without further increase, showing that subjective risk appetite didn’t recover significantly alongside prices (also for sentiment reference only). Over a three-month horizon, RSP continued to outperform SPY, indicating the medium-term breadth foundation is still intact; however, with geopolitical variables yet to be confirmed, capital seemed more inclined to first unwind overly pessimistic positions rather than aggressively add risk. The current market state is closer to 'unwinding panic trades' rather than 'rebuilding trend-based risk.'

IV. Market Scan

1. Index ETFs

All major index ETFs rose, with small-caps leading. IWM surged 2.16%, providing the clearest high-beta recovery signal; DIA rose 1.33%, indicating traditional blue chips also joined the risk recovery; SPY gained 1.05% and QQQ rose 1.02%, both closing positive but relatively weaker among major index ETFs. This combination resembles 'broad-based recovery' rather than 'tech-only gains,' consistent with the structure of small-caps and breadth leadership seen during the day.

2. Sector Performance

Sector-level performance corroborated this view. XLY surged 2.21%, becoming one of the strongest sectors after the sharp drop in oil prices, showing discretionary consumption was more sensitive to easing energy pressures; XLK rose 1.23%, and XLB climbed 1.21%, with technology and materials also warming up in sync. On the other side, XLV fell 0.39%, becoming one of the few sectors to close lower as funds exited relatively defensive areas and moved into higher-elasticity sectors. Monday’s main theme resembled 'unwinding defensive positions' rather than a single sector independently strengthening.

3. Seven tech giants

The seven major tech stocks remain uneven internally. TSLA surged 3.50%, leading the rebound with the strongest momentum, while GOOG only rose by 0.08%, nearly flat, indicating that risk recovery within large-cap tech is not uniform. This divergence further confirms that it wasn't a traditional 'weighted抱团', but rather high-elasticity sectors being favored first as risk appetite recovered.

4. Chinese Equities

Chinese concept stocks generally followed the recovery in risk appetite. Futu rose 3.72%, making it the strongest performer in the sector; Alibaba climbed 2.98%, showing that capital is willing to return to higher-volatility Chinese internet assets. However, Tencent Music fell 1.19%, performing the weakest on a day of overall recovery for Chinese stocks, indicating that even on a rebound day, there was significant internal divergence and it wasn't a broad-based recovery.

5. Cryptocurrencies

The crypto chain continues to demonstrate elasticity. Bitcoin rose 3.57%, indicating that highly volatile assets are regaining support; RIOT surged 7.40%, significantly outperforming the coin price itself, reflecting a typical high beta performance during risk recovery. CRCL only increased by 0.48%, closing in the green but with far less elasticity compared to mining stocks, showing that funds are more inclined towards aggressive crypto concept plays. Overall, this remains a rapid pullback from the 'energy panic trade,' rather than a trend-driven bullish move following the clearance of war variables.

$NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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